High risk homes

By CASEY NEILL
A LEADING insurance company has deemed homes in the Dandenongs too bushfire-prone to cover.
The move has sparked fears other companies will follow suit and leave the hills uninsurable, crippling the housing market.
Fiona and Craig Mitchell have lived in Park Drive, Belgrave for 14 years and insured their home with Calliden.
Last Wednesday 11 July they received a letter from the Australian Unity-affiliated company that said a review had found their property had a high potential for bushfire and Calliden could not continue to offer cover.
“I was distressed when I first opened it. Then I got really angry that they would even be able to do this,” Mrs Mitchell said.
“I’m worried about how many people may be affected by this.”
She spoke to Calliden and was told it would no longer insure any home in the Dandenong Ranges, and the Financial Ombudsman Service told her they could do little about it.
“We are absolutely devastated about the effects this will have on us securing another insurance company,” she said.
“Other insurance companies will probably follow suit.
“People couldn’t afford to sell – no one would buy an uninsurable house. You’d have to live here without insurance.
“A house fire can happen to anyone, anywhere. Why target specific areas?”
The Mitchells, who have two young sons, contacted other insurance companies.
“The quotes that we are getting, our premiums have more than doubled,” she said.
“All of a sudden we’ve got to find this extra money which we weren’t expecting. It’s tough.”
And Mrs Mitchell said premiums would only increase if other insurers pulled out of the hills.
Mr Mitchell said there were much higher-risk areas than Belgrave. The most recent bushfire in the area was in Birdsland Reserve in Belgrave Heights in 2009 and it caused no damage to homes.
Prior to that was the Ash Wednesday blazes in 1983, which affected neighbouring Belgrave Heights and Belgrave South.
But despite the insurance drama, the family would not consider leaving the community that rallied around them when son Connor battled cancer last year.
“We are here hook, line and sinker,” Mrs Mitchell said.
“When you move to an area where you have that real community, you stay there.”
Dandenong Ranges Community Bushfire Group president and Bell Real Estate agent Jo Hirst said the decision was “not good enough” and “would definitely affect house prices”.
“If people want to live here they should be allowed to,” she said.
A Calliden spokesman said the company had chosen “not to continue insuring properties in suburbs with excessive bushfire exposure on a national level”.
He said an analysis using detailed mapping showed 80 per cent of Belgrave was subject to high bushfire exposure.
“Calliden has chosen to be conservative with regards to bushfire exposure,” he said.
An Insurance Council of Australia spokesperson said that where insurers operated was an independent commercial decision for each company.
“Insurance companies will from time to time adjust the number of policies they hold in any one risk-prone region to remain compliant with Australian prudential regulations,” they said.
“However, home and contents insurance is a highly competitive market and a wide range of insurers continue to offer policies in this area.”
A spokesman for Bushfire Response Minister Peter Ryan said he would encourage all insurance companies to work with families living in high bushfire risk areas to ensure appropriate levels of insurance continued to be provided.